Bankruptcy Vs Debt Settlement – a Tough Choice to Make
Debts really pose a difficult situation for every individual. Increased and unpaid debts can lead to circumstances like bankruptcy and debt settlement. Both of these cases arise when an individual is not able to pay back his debts to the creditors and as a result of which they start harassing debtors by charging them late fees and pressurizing them to pay their debts. Unable to cope up with the debt burden, individuals are confused between bankruptcy vs debt settlement.
Both choices have their pros and cons. In order to see the true difference between these two possible debt relief solutions it requires an understanding of both the concepts. If your present or projected income won’t enable you to work your way out of unsecured debts, then bankruptcy is an ideal solution. Debt settlement is a process to negotiate with the creditors on the behalf of individuals in order to agree upon having part of the individual’s debt forgiven.
Bankruptcy can erase all your debts and can be a huge relief for an individual who has excessive debt burden but limited income. It can even provide you with an opportunity to start all over again by erasing the excessive unsecured debts. While in the case of debt settlement, creditors may still have the right to sue you on your unpaid debts. Once you declare yourself bankrupt, the creditors cannot sue you on those unpaid debts.
Bankruptcy also serves to prevent any attachment of wages or other income after the filing of petition. It even prohibits all sorts of collection attempts by creditors against the debtor including repossessions, garnishments or attachments, utility shutoffs, foreclosures and evictions. For more information about bankruptcy vs debt settlement, contact a credible debt relief company.
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